Central Bank of United Arab Emirates (CBUAE) is close to releasing its central bank digital currency (CBDC), called the digital dirham. It’s believed that the currency will support domestic and cross-border transactions, as stated by Cointelegraph.
According to Cointelegraph, on March 23, 2023, it was announced that CBUAE has collaborated with Abu Dhabi’s digital finance services provider R3 to ensure CBDC implementation. Reportedly, the central bank mentioned importance of the step in ensuring financial inclusion.
Based on information by Cointelegraph, first part of the CBDC implementation comprises soft launch of “mBridge,” to ensure CBDC’s integration with international trade, along with domestic CBDC issuance for wholesale and retail purposes. Insights from the announcement mentioned that the step will take the next 12-15 months for completion.
“The launch of our CBDC strategy marks a key step in the evolution of money and payments in the country. CBDC will accelerate our digitalization journey and promote financial inclusion,” Khaled Mohamed Balama, governor, CBUAE, said.
Moreover, Cointelegraph noted that a US Treasury-oriented study found that inclusion of CBDC into an economy would disrupt banks’ working power, and can cause “significant” problems for banking.
(With insights from Cointelegraph)